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What is blockchain and how can you make the most of it?

As we begin 2018, those who invested in Bitcoin this time last year (and stuck with it) are in the money. At the time of writing, one Bitcoin is worth $14,700 almost 2000% increase in one year. But what of the blockchain technology that underpins Bitcoin? What is it, and how can it be used?

What is blockchain?

A blockchain is a series of sequential chunks of information based on a transparent ledger-system, a shared file that keeps track of all historical information. A blockchain ledger records data that’s been verified by a network of private computers.

To add to the ledger, computers on the blockchain network follow a cryptographic protocol (do some very difficult maths) to independently validate updates. This open source system creates an indisputable audit trail that’s:

Secure – The distributed blockchain network is much harder to crack than a centralised system;

Efficient – Data is updated in real time and there’s no manual reconciliation; and

Transparent – There’s a comprehensive record of data that’s open source and traceable.

How can blockchain be used?

Blockchain technology is still comparatively new, but people, start-ups and established businesses have all been experimenting with it.

In France, blockchain is being used to help trade unlisted securities. And in March 2018, the Australian stock exchange will outline its plans to become the first blockchain-based stock exchange.

Maersk, the Danish shipping giant, is pioneering blockchain as a way of digitising and securing operational processes when transporting millions of containers.

Oil and gas firm Petroteq has partnered with First Bitcoin Capital to develop Petrobloq, a blockchain-based platform that lets oil and gas companies efficiently do business around the world and remove supply chain bottlenecks.

The music industry is working to use the technology for transparent, real-time royalty payments.

Everledger, a global start-up working to reduce risk and fraud, is investigating how blockchain can help protect and monitor valuables like diamonds.

In the payment space, start-ups like Abra and Align Commerce offer blockchain-based services, cutting the cost and burden of international payments.

And development platform Github has used blockchain to launch the world’s first digital passport to revolutionise online identification.

Applications for the technology are being developed in all industries it seems. Some are designed to improve operational processes, while others create new products to help customers.

How does blockchain affect your business?

Despite the advances in blockchain technology over the last decade, it could still be many years until it’s widely used in everyday operations. But that doesn’t mean you shouldn’t investigate the opportunity now. We recently helped a large European bank understand certain blockchain applications and develop potential systems and products to successfully adapt.

Blockchain technology is already disrupting the way many companies do business. Even if your industry has yet to be affected, you’ll want to be prepared. Not considering how blockchain could impact your business could be dangerous - if competitors re-engineer their supply chains or offer customers better security using blockchain, you‘ll want to be right on their heels.